Formaldehyde is a chemical the U.S. government calls a carcinogen, or known cancer-causing chemical, but the substance is not regulated.

The test results prompted Sen. Amy Klobuchar to step in, asking the government take a second look at regulating the chemical, especially when it's added to clothing for babies.

KARE 11 hired the Analytical Sciences Laboratory in Petaluma, Calif. to test a variety of clothes babies commonly wear. We selected 18 items in all, ranging from sleepers and onesies to shirts and pants.

The tests found high levels of formaldehyde exceeding the apparel industry's own standards in two pairs of Old Navy leggings made for toddlers. Trace amounts of formaldehyde turned up in four other items of baby clothes.

We launched the investigation after an Isanti mother feared the chemical was in her two-year-old daughter's clothing. Katie Hinrichs, 30, of Isanti, says last August a hive-like rash appeared on her daughter Jenny's legs in the same places where her leggings hugged her skin tightly. Hinrichs says she bought a toddler outfit from the North Branch Old Navy outlet and dressed her daughter without washing it first, something she says she rarely does.

"The rash started at the top of her feet, went up to her waistband, also around arms of shirt where it was tighter and rubbed a lot. At first, I was worried it was chicken pox, but then it was only where the clothing was touching," said Hinrichs.

After calling her pediatrician, Hinrichs says she did online research, called Old Navy and asked if the company uses chemicals in clothing.

"I talked to one of their customer relations representatives and he did confirm that they do use formaldehyde in children's clothing," said Hinrichs.

Hinrichs thought other parents should know more about the issue, and she asked KARE 11 to test her daughter's clothes for formaldehyde levels.

In more than a dozen countries around the world, from Japan to China and Germany, formaldehyde levels for children under the age of three cannot exceed 20 parts per million by law. Again, the U.S. does not regulate formaldehyde in clothing, but many U.S. apparel companies choose to follow the 20 ppm standard voluntarily through guidelines offered by the American Apparel and Footwear Association.

With that in mind, KARE 11 expanded the testing to other popular brands of children's clothing beyond Old Navy and included Target's Circo brand, Baby Gap, Gymboree, Carters and Osh Kosh B'gosh. We tested several pairs of leggings similar to the kind Jenny wore.

"We are doing this kind of testing more and more. I was surprised and still am surprised that they use formaldehyde in treating children's clothing," said Analytical Sciences lab owner Mark Valentini.

Two of the 18 baby clothing items exceeded the international standard of 20 ppm when it comes to formaldehyde in clothing. The leggings Jenny wore when her mother says she broke out in the rash tested at 38 ppm. Another identical pair of leggings purchased around the same time, but not worn by Jenny, tested at 120 ppm.

Trace amounts of formaldehyde showed up in Oshkosh B'Gosh jeans at 1.6 ppm, a Gymboree corduroy shirt and pants at showed levels of 2.7 ppm and 4.2 ppm. In the shirt Jenny wore levels were at 2.2 ppm. The Target Circo and Baby Gap items had no detectable formaldehyde in them.

Our testing seemed in line with 2010 study by the Government Accountability Office, which tested 180 pieces of adult and children's clothing and found 10 items with dangerously elevated levels. At the time, the GAO report had no recommendations, but concluded the greatest risk from formaldehyde in clothes is skin rashes, or what is known as contact dermatitis.

"They just have to keep it within the limits that are safe and in this case when she gets a rash, that didn't happen," said Klobuchar.

Prompted by KARE 11's findings, Klobuchar sent a letter asking the GAO recommend how the U.S. can regulate formaldehyde in clothes. The GAO is still processing her request.

"We have to base it on the science, and so far the industry itself has said for babies, formaldehyde should be under 20 parts per million, in this case, they violated their own standards," said Klobuchar.

The GAO study also said washing clothes before wearing them can break down formaldehyde levels, but it is not always successful. Its experts also said people with allergies to formaldehyde should avoid clothing with formaldehyde, but admitted that's difficult when it's not listed on the label.

We showed Jenny's rash to dermatologist Scott Prawer, of Associated Skin Care Specialists in Maple Grove. He isn't Jenny's doctor, but specializes in patients with formaldehyde allergies. After looking at photos of her rash, Prawer believes her reaction was called contact urticaria, a rare reaction to formaldehyde.

"It would be impossible to get rid of formaldehyde. It's in everything, clothing, shampoos, makeup, topical medication," said Dr. Prawer. "But, in clothing it's not harmful, to the average person, to everyone who is not allergic to it."

Prawer says only a small patch test can determine a true sensitivity. Jenny didn't have the test, because her mother says the test is costly and not covered by insurance.

In Minnesota, a group fighting toxic chemicals says the burden of testing shouldn't be on families. The Healthy Legacy Coalition unsuccessfully tried to convince state lawmakers to ban formaldehyde in clothes in the past, after their own tests showed it in baby products. Healthy Legacy Co-Director Kathleen Schuler cited one crib sheet in particular.

"The crib sheet is an example of a product that contains formaldehyde to make it look good, to make it look smoother. It's used as a fabric finish. This is a product where we don't need to have formaldehyde, I mean, who cares if we have wrinkles in the sheet? I also question why do you need formaldehyde in children's clothing? Why put it in at all?" said Schuler.

Hinrichs contacted Healthy Legacy with her concerns and back then the group bought new leggings just like Jenny's. That pair, along with Jenny's leggings, were the two that tested highest. The pair purchased by Healthy Legacy measuring 120 parts per million, six times the industry standard.

"You wonder are they really testing these products to make sure their own standards?" said Schuler.

At the Minnesota State Capitol this spring, Minnesota became the first state to take a stance on formaldehyde, banning it from baby shampoos, lotions and soaps. The bill was pushed by Sen. Ann Rest, a Democrat from New Hope. It was signed into law by Gov. Mark Dayton this week. Rest is a grandmother hoping Minnesota's leadership on protecting children from chemicals will nudge other manufacturers.

"We know that formaldehyde occurs naturally in environment, but that's the point. The point is you don't introduce it intentionally in a product you know is not healthy for the kid. We put frogs in it in biology class. We know it's a good preservative, but maybe not a good preservative when we are putting our pajamas on or maybe not a good preservative when we are washing our baby's hair," said Rest.

Starting in 2014, manufacturers can no longer add formaldehyde to children's personal care products in Minnesota. In 2015, stores in Minnesota can no longer sell baby products with formaldehyde.

While Healthy Legacy has been behind change on a state level, Schuler hopes for broader change.

"We basically have a toothless federal law that allows chemicals on the market without proper testing. The Toxic Substances Control Act hasn't been changed or reformed in 30 some years. Of the 80,000 chemicals used in commerce, only five have been banned under the act," said Schuler.

Hinrichs agrees the federal government needs to set formaldehyde standards for retailers and manufacturers. She says in the end, Old Navy investigated her concerns, but denied any negligence.

"I think it's unbelievable. The fact that her legs broke out the most is reflected in the report," said Hinrichs.

Gap Inc, which owns Old Navy, told KARE 11 customer safety is a priority, adding that Old Navy sold tens of thousands of these leggings across the U.S. in 2012, and Jenny's situation was the only customer complaint about the product.

"We work with accredited, independent third-party labs to test our branded products to ensure that we meet domestic and international safety and regulatory standards. These labs test against the Japan standard for formaldehyde of less than 20 ppm, which is the world's strictest standard. We looked into the lab's testing records for this product, and their records show that both the fabric and the finished garment of this style of leggings passed our formaldehyde standards," said Gap, Inc. spokesperson Debbie Mesloh.

Carter's and OshKosh B'Gosh says they also adhere to the industry standard of 20 parts per million.

Babies 'R' Us, a brand we did not test, says they follow an acceptable level of 16 parts per million for formaldehyde in clothing.

Target says in a written statement theylimit formaldehyde to 20ppm for owned brand, textile-based products for newborns to 5-year-old children. In addition, Target says its own kids' apparel, which range from size 4 to size 16, have a limit of 75 ppm.